Correlation Between CHEVRON and Verizon Communications
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By analyzing existing cross correlation between CHEVRON USA INC and Verizon Communications, you can compare the effects of market volatilities on CHEVRON and Verizon Communications and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CHEVRON with a short position of Verizon Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEVRON and Verizon Communications.
Diversification Opportunities for CHEVRON and Verizon Communications
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHEVRON and Verizon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding CHEVRON USA INC and Verizon Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verizon Communications and CHEVRON is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CHEVRON USA INC are associated (or correlated) with Verizon Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verizon Communications has no effect on the direction of CHEVRON i.e., CHEVRON and Verizon Communications go up and down completely randomly.
Pair Corralation between CHEVRON and Verizon Communications
Assuming the 90 days trading horizon CHEVRON USA INC is expected to under-perform the Verizon Communications. In addition to that, CHEVRON is 1.13 times more volatile than Verizon Communications. It trades about 0.0 of its total potential returns per unit of risk. Verizon Communications is currently generating about 0.05 per unit of volatility. If you would invest 3,315 in Verizon Communications on September 2, 2024 and sell it today you would earn a total of 1,119 from holding Verizon Communications or generate 33.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 73.19% |
| Values | Daily Returns |
CHEVRON USA INC vs. Verizon Communications
Performance |
| Timeline |
| CHEVRON USA INC |
| Verizon Communications |
CHEVRON and Verizon Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEVRON and Verizon Communications
The main advantage of trading using opposite CHEVRON and Verizon Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEVRON position performs unexpectedly, Verizon Communications can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Verizon Communications will offset losses from the drop in Verizon Communications' long position.| CHEVRON vs. AEP TEX INC | CHEVRON vs. US BANK NATIONAL | CHEVRON vs. Bank of America | CHEVRON vs. GE Aerospace |
| Verizon Communications vs. T Mobile | Verizon Communications vs. Comcast Corp | Verizon Communications vs. Lumen Technologies | Verizon Communications vs. Charter Communications |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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